Iran denied that any negotiations with the US had taken place, with the country’s Speaker accusing the President of manipulating the markets with his comments.
“Fake news is used to manipulate the financial and oil markets and escape the quagmire in which the US and Israel are trapped,” Mohammad-Bagher Ghalibaf said.
It is not known whether one individual or several entities were responsible for the trades, but the timing of the bets raises concerns that well-placed individuals are profiteering from sensitive government information and operations, including the recent capture of Nicolas Maduro in Venezuela.
“It’s hard to prove causality ... but you have to wonder who would have been relatively aggressive at selling futures at that point, 15 minutes before Trump’s post,” one market strategist told the Financial Times.
The White House denied that any profiteering had taken place.
“The only focus of President Trump and Trump Administration officials is doing what’s best for the American people,” a spokesman said.
“The White House does not tolerate any Administration official illegally profiteering off of insider knowledge, and any implication that officials are engaged in such activity without evidence is baseless and irresponsible reporting,” they added.
Polymarket is a prediction platform which allows users to bet on everything from the Iran war to the year of Jesus Christ’s second coming.
At the start of the conflict last month, a number of large Polymarket bets on the US attacking Iran generated a combined profit of US$330,000, much of which occurred in the hours before the first strike.
Chris Murphy, a Democratic senator, also flagged bets showing 109 individuals had made at least US$10,000 on Iran bets before the war.
One Polymarket user, known as Magamyman, made more than US$500,000 with a bet that Iran’s Supreme Leader, Ali Khamenei, would be out of power.
Six Polymarket accounts set up between December 30 and January 2 were paid US$133,878 after correctly betting on Venezuela-related topics before the US launched its operation to kidnap Maduro, the country’s leader.
One individual made US$400,000 predicting Maduro’s ousting only hours before he was abducted by US special forces.
Others have raised doubts about insider trading, with one expert suggesting yesterday’s oil trades were not “excessively large”.
At the same time as the pre-post bets, trading volumes for Brent and WTI increased.
“That is a larger than usual volume [in Brent and WTI] than I would expect at that time of day, but in the same breath, it’s not excessively large. I find it a bit hard to join the dots here,” Tim Skirrow, the head of derivatives at Energy Aspects, said.
Murphy, along with Greg Cesar, a House representative, is set to introduce legislation to rein in prediction markets such as Polymarket and Kalshi, which do not require customers to provide their names and work using cryptocurrencies.
Last week, two politicians introduced the Banning Event Trading on Sensitive Operations and Federal Functions (Bets Off) Act, which would ban bets on “government actions, terrorism, war, assassination, and events where an individual knows or controls the outcome”.
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